Chapter Seven

Corporate Ethics: Good Governance

WHAT IS CORPORATE GOVERNANCE?

Corporate governance is typically perceived by academic literature as dealing with “problems that result from the separation of ownership and control.”1 From this perspective, corporate governance would focus on: The internal structure and rules of the board of directors; the creation of independent audit committees; rules for disclosure of information to shareholders and creditors; and, control of management. Figure 7.1 explains how a corporation is structured.

Fig. 7.1 Separation of Ownership and Management

DEFINITIONS OF CORPORATE GOVERNANCE

Though the concept of ...

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